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Mid-sized Firms Outsource more than Large Enterprises

The mid-sized market was seen outsourcing more compared to larger enterprises while using different suppliers.

Increase in BPO and ITO contracts

The mid-sized market posted a 124% increase in business process outsourcing (BPO) and information technology outsourcing (ITO) contracts through the past five years, with each valuing between $10m and $25m, according to a Forbes G2000 report shared by Information Services Group (ISG). Meanwhile, contracts breaching the $25m mark increased by 72%.

Much of the growth identified in the G2000 range came from the smallest division which is composed of companies that have not or have minimally outsourced before, said Deborah Card, Partner at ISG. She added that only 25% to 30% of the firms belonging to the group have tried outsourcing before 2008.

Moreover, Card said some of the factors that make outsourcing marketable to mid-sized firms are its cost saving feature and the fact that it is easier for them to do so because they do not have legacy systems.

Other processes which are usually procured by the segment are Infrastructure as a Service (IaaS), Software as a Service (SaaS), and Business Process as a Service (BPaaS), but for companies that do not want a full-on outsourced operation, they turn to the cloud.

However, Card said those that are new to outsourcing are showing the same mistakes that bigger organizations made before. These include lack of preparation and planning for management turnover and poor forecasts on what to expect out of the operation.